Input-output analysis on the economic impact of medical care in Japan

Since the Cabinet's decision concerning the Basic Policies 2005, the Japanese government has implemented specific measures to suppress increases in national medical care expenditure. However, we believe that the economic significance of medical care should be quantified in terms of its economic impact on national medical care expenditure. No one has examined the economic impact of all medical institutions in Japan using data from a statement of profits and losses. We used an input-output analysis to quantitatively estimate economic impact of medical care and examined its estimation range with a probabilistic sensitivity analysis.

To estimate the economic impact and economic impact multipliers of all medical institutions in Japan, an input-output analysis model was developed using an input-output table, statement of profits and losses, margin rates, employee income rates, consumption propensity and an equilibrium output model. Probabilistic sensitivity analysis was conducted using a Monte Carlo simulation.

Economic impact of medical care in all medical institutions was ¥72,107.4 billion ($661.5 billion). This impact yielded a 2.78-fold return of medical care expenditure with a 95 % confidence interval ranging from 2.74 to 2.90.

Economic impact of medical care in Japan was two to three times the medical care expenditure (per unit). Production inducement of medical care is comparable to other industrial sectors that are highly influential toward the economy. The contribution to medical care should be evaluated more explicitly in national medical care expenditure policies.